Low Wages in Third World Countries Essay

Low Wages in Third World Countries

Introduction

Globalization has created numerous opportunities as well as challenges.  Among the issues in question is labour outsourcing where organizations venture into markets outside their home country in search of cheap labor. These organizations either relocate their production plants or simply establish sister plants in the selected countries where the cost of labour is low and thus low production costs.  This is a strategy that has been adopted by many international businesses with great success.  The same work is being done at different costs in different countries.  Some of the countries where labour outsourcing has been are poor third world countries where the standard of living is low and the people are poor and desperate for work.

These people therefore are willing to work for little pay and anyway the wage rate is usually lower than in the industrialized countries.  The question that begs attention is:  is it ethical to use different salary scales for the same work?  Is it not an exploitation of the vulnerability of the poor in third world countries?  This section examines these ethical questions in view of some existing ethical theories and at the same time expresses the author’s own position on this issue.

The Problem

At a casual glance the issue of labour outsourcing may seem like a perfectly normal even desirable strategy owing to its benefits in reducing the cost of production.  Labour outsourcing has been instrumental in enhancing the competitive advantage for many business organizations.  It does not seem to cause any harm since the wage rates in the host countries are usually lower, besides, this is viewed as foreign investment that is sought by many a governments especially in the third world countries to relieve the economy of the burden of unemployment.  This practice ahs another obvious benefit in that it opens the market in the host countries as well as the neighbouring countries.  However after close scrutiny, the practice raises very practical ethical questions.  In light of the major ethical theories this issue requires our examination.  This is because of the wage disparity that the practice creates.   When similar products are manufactured in different countries, should the people providing the human resource required in this production be treated differently just because of their economic status?

After careful reflection with the guidance of this module that has exposed me to the main schools of thought about ethics especially in the business arena, I feel that this issue is ethically deficient.  According to the Kantian deontology the categorical imperative allows that we “act only on that maxim through which you can at the same time will that it should become universal law” (Rawls, J. 2001).  As the module began, my thinking about ethical issues in the business world was much undeveloped. However as I was introduced to critical reasoning about business ethics, I slowly developed deep convictions about the issue as well as other issues that have ethical connotations.

After reflecting on what Kant is saying and coming to a clearer understanding of the implications of his discourse, I have found myself giving this issue much thought. I began to see that that what Kant was saying was the same as doing unto others what you would expect them to do unto you. This led me to question myself about the issue. It is very true that no one would expect or wish to be treated unfairly by others. It is therefore acting without considering the other person when you put the through some treatment that you would hate to go through or be put through. This simple truth highlighted the selfishness that is inherent in the majority of the people. It also opened my eyes to see how better the world could be if people were really to treat others as they themselves wished to be treated. As my thoughts continued to develop, I saw that it was truly selfish for the employers to apply double standards in the payments issue. Paying the poor less just because they were desperate and were willing to do the job for less because they did not have any better option is a detestable thing. Who among the perpetrators would wish to be put in the same position as their victims?

I continually asked myself if that meant that there were first class citizens in the developed world and second class citizens in the third world? That is indeed not so because people in both the developed countries and the poor countries are subject to all the emotions common to human beings. It follows that people in the third world also have feelings and so should be treated just in the same way that those in the developed world would wish to be treated. As my mind expanded to a clearer understanding of what Emmanuel Kant was saying, It dawned on me that something was amiss. I appreciated the reasoning behind the first formulation. The reasons given by the proponents of this kind of practice are just excuses and masks to hide the greed and the selfishness of those responsible. Others have asserted that the economic benefits extolled by the same supporters are not comparable to the profits that these companies make. What is paid to the employees is then a paltry sum if compared to the profits as well as the salaries of the top management. The more I reflected on this in light of Kant’s categorical imperative, in the course of this module, I developed a deeper conviction on the impropriety of this matter.

Similarly, the second formulation of the categorical imperative allows that we “act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means but always at the same time as an end” (O’Neill, Onora 1993). On reflecting on this maxim, it really came to me what it meant and how applicable it was in many cases in today’s society. The notion embodied is that of respect for the other person. According to Kant each person by virtue of their rational nature has an inherent dignity (O’Neill, Onora 1993). It follows that all human being as rational beings deserve respect from other people as well as from their own selves. This is a fundamental principle that directs us to treat others not just as a means to some end but also always as an end. We then have a duty to others as well as ourselves. These duties are further categorized as Perfect duties to others, perfect duties to self, imperfect duty to others and imperfect duty to self. Perfect duties are superior to imperfect duties and are binding at all times (O’Neill, Onora 1993). On the contrary, Imperfect duties require that we promote certain actions for instance the welfare of others. It occurred to me as I contemplated on this matter that using the poor merely as a means of achieving corporate objectives was incompatible with respect. It is therefore unacceptable and unethical to pay the poor less than what was paid to others in developed countries to do the same thing. The two formulations above formed the basis of my thinking.  In the beginning of this module, I did not consciously concern myself with these matters however as the course progressed, I was awakened to the fact that this was an important issue.  I got an opportunity to weigh what Kant was saying and to gain some insight on this issue and I realized that there the perpetrators of this practice were applying a kind of discrimination and segregation against the poor in developing countries. This is because the disparity created is against the rules of natural justice.

I now feel strongly that the wage disparity is discriminatory and seems to promote the idea that some people are more equal than others.  It is wrong to take advantage of the poor in order to advance organizational objectivity.  Doing so is tantamount to economic segregation.  It is against the Kantian first formulation of the categorical imperative.  Paying workers in the third world countries less than what is paid to workers doing the same job in the same organization but in different countries cannot be willed that it should become universal law.  When I interpret and simplify this formulation it comes to treating the other person as one would wish t be treated.  It follows that the perpetrators of this practice will obviously not wish to be in the positions of the victims of their decisions.  This is applying double standards and it is selfish.  Additionally it is in clear contradiction with Kantian second formulation that requires us never to treat other people simply as a means but always at the same time an end.  This issue serves as one of the clearest case of using the poor as a means of achieving the corporate objective.  The proponents of the practice may argue about the creation of jobs and the other points in trying to advance it.  However, I think that is beside the point.  It should be remembered that this practice contributes to the economic inequality in the world.

The utilitarian ethical theory ahs also influenced my views towards issues such as this.  According to John Stuart Mill, “All action is for the sake of some end”.  This theory asserts that the moral worth of an act is determined, directly or indirectly by the consequences (Goodin, R. 1995).   This theory also concerns itself with creating a civilized society where self-interests as well as common interest could be combined (Shaw, W. 1999).  My concern has therefore been aroused because the wage disparity between the industrialized world and the third world is an issue that advances only the interests of one side – those of the rich owners of the organization.  I strongly feel against the practice on ethical grounds because, it is selfish, discriminatory, exploitative and wrong.

The second Problem

One other issue that has been increasingly on my mind since this module started has to do with companies and the environment.  It has been a concern of mine to read reports that the current level of global warming if not reversed will reach a point where the seas will not subsidize the food chain as increasing heat kills micro-organisms that initiate ingestion while at the same time the increasing sea levels will destroy up to 30% of the land area on which both humans and thousands of species derive their livelihoods (Brennan, T. 2003, xvii).  We have already experienced draught in Africa and Asia, worst storms in years, the hottest years, and tropical diseases found in the warmer western world and many other climatic changes.  These are direct consequences of environmental pollution and degradation (Brennan, T. 2003, xvii).

Man is the single contributor to the environmental pollution that we are experiencing today. It is through economic (business) activities that man produces the toxic emissions that pollute our air.  Economic activities involve movement of people, goods as well as industries.  The transport sector uses vehicles which consume fossil fuel and emit toxic gases in the air.  Industries are some of the major culprits producing large amounts of gases as well as other toxic substances.  This is besides the fact that human greed combined with need for land for building industries and development has made humans to encroach on wildlife habitats, pushing these wildlife deeper and deeper to the point where they face certain extinction if nothing is done (Megone, C. 2002).  The question then arises as to whether it is ethical to endanger the environment and by extension the lives of humans and other species in the pursuit of profit objective.  This profit is then only enjoyed by these business people at the expense of the common good.

It has struck me that manufactures and basically the corporate world have the biggest responsibility to be on the forefront of pushing for environmental conservation efforts.  However the opposite is true.  These same business entities go further to avoid taking even the minimum care in protecting the environment.  A case in point is the dumping of toxic waste in Abidjan – Ivory Coast by a multinational company.  This single act killed ten people and thousands were treated for symptoms arising from inhaling the air or drinking water polluted by this toxic waste (Ofeibea Quist-Arcton. 2006).  According to the Kantian theory business entities are contravening moral and ethical codes of conduct. How could one will that the current practice of pollution of environment without batting an eyelid on the part of businesses become universal law?  This is tantamount to committing suicide.  Inconsiderate pollution of the environment by companies is treating other people simply as a means to an end. The end, in this case being profits.

Additionally, according to utilitarian theory all actions are judged by their consequences.  I believe the actions of companies to continue engaging in production activities (and other activities) that have adverse effects on the environment have some of the worst consequences (O’Neill, Onora 1993).  The negative utility of such acts is hard to compute in comparison to the positive utility.  However it is easy to see the potential that environmental destruction is wiping out life on earth.  This is not comparable to any economic benefit that may be gained in even a thousand years.  It is therefore unethical for business entities to fail to be careful about matters of environment.  This is not to say that all economic activity should be abolished, rather, that business entities should be at the forefront of seeking innovative ways in which the environment can be protected such as adoption of safe ways of toxic waste disposal, reduction in the use of fossil fuel as well as adopting environmentally friendlier technology.  These coupled by other efforts such as tree planting and conservation of wildlife habitats could go along way in reducing the effects of pollution.

Conclusion

Ethics is an issue that is taken casually by people of various walks of life including business owners, governing authorities as ell as the civil society.  I never gave much though to ethical consideration before starting on this module that has awakened my consciousness to the issues discussed above as well as many others.  I now strongly feel that ethical studies should be made compulsory to people aspiring leadership positions so that as decision makers they could push for ethical decisions and actions from their positions.  This could go a long way in checking unethical conduct.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference:

Brennan, T. (2003). Globalization and Its Terrors. Routledge. London. Page, 42.

Goodin, R. (1995). Utilitarianism as a Public Philosophy. NY: Cambridge Univ. Press. 46, 57

Mark R. Vickers (2005) Business Ethics and the HR Role: Past, Present, and Future. Human Resource Planning. Volume: 28. Issue: 1.

Megone, C. (2002) Case Histories in Business Ethics Routledge.London. Page Number 34

Ofeibea Quist-Arcton (2006). Ivory Coast Tragedy Exposes Toxic Flow to Poor. Available on line at: http://www.npr.org/templates/story/story.php?storyId=6354149 Accessed

O’Neill, Onora (1993). ‘Kantian Ethics’ in ‘A Companion to Ethics,’ ed. Peter Singer. Oxford: pp63-78

Rawls, J. (2001). Justice as Fairness: A Restatement. NY: Belknap Press. Pg 61-63

Shaw, W. (1999) Contemporary Ethics: Taking Account of Utilitarianism. Cambridge, MA:

Blackwell Publishers, pg 112-34

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